From time to time, Euromoney awards companies for their excellence, and corporate social responsibility. Recently, Guaranty Trust Bank clinched the award for best bank for Corporate Social Responsibility in Nigeria based on their GTCO Food and Drink Festival, GTCO Fashion Weekend, and their annual GTCO Autism programme. What exactly is Corporate Social Responsibility, and what can companies do to make their corporate social responsibility significant?Here’s everything you need to know about why companies engage in corporate social responsibility.
What is Corporate Social Responsibility?
A familiar term people used to describe corporate social responsibility is CSR. Though CSR could mean other things than corporate social responsibility, it is however widely interpreted to mean corporate social responsibility, especially when used by organisations.
Corporate social responsibility are the voluntary efforts companies give for the improvement and betterment of society, socially, environmentally, and economically. Companies carry out corporate social responsibility mainly to improve society.
Is Corporate Social Responsibility Legal?
Since corporate social responsibility could affect people, the environment, or the economy, it is normal to ask if it is legal. Yes, corporate social responsibility is legal. It complies with laws and regulations. CSR embodies not only social expectations, but legal and ethical expectations.
The legal expectation allows companies to be accountable to stakeholders, not shareholders only.
Why Do Companies Engage in Corporate Social Responsibility?
Though aimed at improving society economically, socially, and environmentally, there are still benefits that companies derive when they voluntarily put efforts in making the society better.
Maintaining a Good Publicity
As a company that is involved in CSR, it is easy to have and sustain a good image. With frequent interactions, contributions, job opportunities, infrastructure development, and impact to members of society, reputational risks are mitigated, while enhancing the already built good image in the public.
Trust Among Customers
Seen to always participate in CSR, customers can easily put their trust in the brand. With CSR, companies enhance the trust customers, and stakeholders place on the brand. Industry StandardsThis is another vital aspect that propels companies to perform CSR. The opportunity to meet regulatory compliance and industry standards without falling short on expectations is achieved through CSR.
New Prospects for the Business
That is what CSR is capable of doing – the ability to help brands identify new business prospects that could transform the business through realistic practices and goals.Talent Retention After attracting the best talents, companies often found it difficult to retain them. Corporate social responsibility offers better opportunities to attract and retain talents, which eventually results in reduced turnover.
High Level of Confidence Among Investors
While many strive to convince investors that their brands are fairing well, companies who regularly carry out corporate social responsibility gets a high level of confidence from their investors, as well as attract potential investors.
How to Develop Corporate Social Responsibility Model
Companies that have set out to engage in corporate social responsibility and looking for the models to adopt to fully carry out CSR, should consider these models.
Integrated Corporate Social Responsibility: integrated CSR is a model that is executed by putting two things into consideration – both social and environmental considerations into how the business is operated.
Strategic Corporate Social Responsibility: also known as strategic CSR, it is a model that demands the alignment of CSR initiatives with business goals.
Philanthropic Corporate Social Responsibility: philanthropic CSR is quite different from integrated and strategic CSRs, as it only focused on donations. It uses a model that is concerned with charitable donations and community development.
When any or all of these models are adopted, companies can measure the success rate of their corporate social responsibility using Key Performance Indicators depending on the goals developed, stakeholders engagement, CSR reporting, or the social return on investment.
Corporate social responsibility is a win-win situation which provides brands with long-term growth, improve stakeholders relationship, and help provide a better future.
